Key findings from Mortgages Direct survey for June reveals:
- Mortgage borrowers believe interest rates are at their lowest with only 39% of borrowers who opted for fixed rate deals choosing two year deals, compared to 50% last month.
- Buy to let mortgages are at an all time low at only 1%
- First time buyer levels remain stable at 40% of total mortgage applications
The latest data from Mortgages Direct shows an increase of mortgage borrowers opting for longer term fixed rate deals of 5 years or more, with only 39% of borrowers opting for fixed rate deals choosing two year deals.
Peter Gladdy, Director of Mortgages Direct comments: “Although there is a lot of speculation that interest rates will drop in the imminent future. More and more borrowers are now becoming a lot more cautious and are not prepared to take the chance that the rates will lower any further and therefore securing their loans at the current levels. With interest rates in historical terms at inherently modest levels, borrowers are showing little confidence that the rates will remain at this level.”
Despite the changing ratio of borrowers opting for longer term fixed rate deals, two year fixed rate deals and two year variables still remain the most popular, therefore indicating that many borrowers believe interest rate levels will at least hold out for the next two years.
Mortgages Direct has also seen a significant increase in first time buyer mortgage applications over the past two months, which has remained at 40% from 35%.
Peter Gladdy comments; “Although we have seen an increase in first time buyer levels, the housing market is still faltering and it is vital we continue to help first time buyers onto the property ladder. Interest rates are a major influence on buyer and seller activity and if the Bank of England does bow down to economic pressures and reduce interest rate levels it will give the housing market that all important boost.”
The Mortgages Direct survey reveals that there is a continuing unwillingness to link a mortgage to an investment with only 1% of borrowers taking out buy-to-let mortgages down from 3% last month.
